The website imposed ‘most favoured nation’ clauses on home insurance providers selling through its platform, which barred Compare the market from being undercut elsewhere.
As a result, competition between price comparison websites and between home insurers selling through these platforms, was restricted, said the CMA.
This meant rivals were unable to compete harder by reducing commission fees, for example, putting Compare the Market under less competitive pressure.
On 30 November 2017, two months after the launch of the CMA’s investigation, Compare the Market contacted the insurers to inform them it would no longer be enforcing the ‘wide most favoured nation’ clauses.
The investigation ran for two years from December 2015 to 2017.
Michael Grenfell, the CMA’s executive director for enforcement, said: “Price comparison websites are excellent for consumers. They promote competition between providers, offer choice for customers, and make it easier for consumers to find the best bargains. It is therefore unacceptable that Compare the Market, which has been the largest price comparison site for home insurance for several years, used clauses in its contracts that restricted home insurers from offering bigger discounts on competing websites – so limiting the bargains potentially available to consumers.”
He added that digital markets can yield great benefits for competition and warned it would not hesitate to step in again across the market to protect consumers.
Martin Schulthiess, chief commercial officer at Uinsure said: “This news is another blow for consumers, following the FCA’s conclusion that unfair pricing practices is widespread and costing customers at renewal.
“We estimate over 600,000 advised mortgage customers will choose their home insurance through price comparison websites each year. If there was ever a time for advisers to offer advice through an intermediary insurer who can give reassurance of fair pricing practices – it’s now.”